Southern Water Services, a U.K. water company recently acquired by First Aqua, will unleash a wave of long-dated sterling paper on the market in the form of a £1.87 billion whole business securitization. The deal is being lead managed by Royal Bank of Scotland and Citigroup. A securitization banker at Citi said the deal will hit the market this week.
The deal will feature a monoline wrap from MBIA Insurance and will be backed by Southern Water's revenues and assets. The deal is expected to be well received, say London-based asset-backed traders. They note there is a large amount of pent-up demand for long-dated sterling paper. The deal's 30-year triple-A rated paper is being talked at 80 basis points over index-linked gilts.